4 Monthly Dividend Stocks Paying Up To 6.3%

Here’s a fact: if you want to clock out of the workforce in any kind of comfort, you’ll need $4,000 a month—$4,074, to be exact.

How do I know?

Because that’s what your average 65- to 74-year-old couple shells out every month, according to the Bureau of Labor Statistics. It comes out to $48,885 a year.

Of course, that figure swings based on where you live, but let’s look at your typical retirement hotbeds: I’m talking about the Carolinas, Florida and Arizona—places you’d like to live if your idea of retirement doesn’t involve pushing a snow blower.

According to a recent CNBC survey, all of these states ranked in the middle of the pack by cost of living. So for plenty of folks, that $4,074 figure probably isn’t far off.

But there’s a problem.

If you want to live on dividends alone—a goal we need to shoot for if we want to ensure our retirement really is crash proof—you’ll be hard pressed to bring in even this modest level of income … even with a $1-million nest egg!

Exhibit A: The S&P 500, with an average yield of just 1.9%. Even if we had a cool mil in the bank, we’d be pulling in just $19,000 in income. That’s not even 40% of what we’ll need and not far above the poverty line ($14,507) for a two-person over-65 household!

Ten-year Treasuries are a bit better, but at 2.25%, you’re only getting $1,875 a month, or $22,500 per year, on a million bucks, which isn’t even halfway there.

Neither option is good enough.

In a moment, I’ll show you 4 rock-solid income plays that will easily beat a 4.9% payout, the number you’d need to live on dividend income alone in this scenario, without having to sell a single share in retirement.

Before I do, here’s another benefit these 4 red-hot buys share—and few other investments can match.

The Power of Monthly Dividends

I don’t know about you, but I hate marrying a monthly stream of bills with an income stream that rolls in quarterly. It just doesn’t work.

Luckily there’s an easy fix: stocks that pay dividends just as your bills arrive: every single month.

Our other two plays here are long-term-care-facility operator LTC Properties (LTC) and EPR Properties (EPR), owner of theaters and entertainment complexes across the US.

Between them, these three REITs yield 5.2%, on average, so we’re already above our “breakeven” 4.8%, and those payouts are easily covered by funds from operations (FFO; the REIT equivalent of earnings per share). That means we can look forward to some nice dividend growth here, too, which will goose our yield even higher.

The topper: all three are bargains.

… and 1 Closed-End Fund to Juice Our Monthly Payout to 5.5%

If you haven’t heard of CEFs, don’t worry. There are only 600 or so out there, as opposed to some 1,800 ETFs.

The main benefit: fat dividend yields. Plus, many CEFs also trade at discounts to their net asset value (or NAV).

Translation: we can buy cheap, then sit tight as those discount windows slam shut!

The Gabelli Global Utility & Income Fund (GLU) yields 6.3% and sports a 13.2% discount to NAV now. That’s a slightly narrower gap than its 52-week average of 14%, so there may not be much immediate “price snapback” potential here. But the fact that GLU trades close to its average discount gives us some downside protection.

And as my colleague Michael Foster wrote in March, the market has disrespected GLU for some time, and the fund actually traded at a premium to NAV a little more than three years ago, so we’re long overdue for a shift.

Either way, we’ll happily pocket GLU’s 6.3% dividend (paid monthly, of course), because it’s as steady as they come:

Add it up, and you get a nice 4-stock portfolio that delivers exposure to real estate (healthcare, utilities and retail) and global and US utilities. Plus, your average yield of 5.5% hands you $4,583 a month on a $1-million nest egg, well above what the Bureau of Labor Statistics says we need.